An aerial view shows La Defense business and financial district in Courbevoie near ParisReuters

The suspected Islamic State (Isis) militants holed up in an apartment in northern Paris suburb of Saint-Denis following a raid by French special police had planned to carry out an attack on La Defense district in Paris, according to multiple sources.

A source close to the investigation told Reuters that La Defense, a major business district located west of Paris, was the target of a new terrorist operation by the IS militants after the 13 November attacks in Paris that left 129 dead. Other police sources confirmed the intelligence to France 24 and France Info TV.

Gunfire and explosions were heard in Saint-Denis early on Wednesday (18 November) as RAID police, French special operations, surrounded an apartment in search of suspects linked to last Friday's attacks.

French soldiers secure the area after shots were exchanged in Saint-Denis, France, near ParisReuters

Police sources said the target of the operation is Belgian jihadist Abdelhamid Abaaoud, the mastermind behind the Paris attacks, after reports claimed he may not be in Syria's Raqqa, as initially believed.

Abaaoud, a 28-year-old of Moroccan origin, has been linked to a number of terror plots and recruitment efforts in Europe over the past two years. The eighth suspect in the attack, Salah Abdeslam, was also said to be a target in the raid.

Two attackers were killed, including a woman who detonated a suicide belt, and five people were arrested. Five French police officers were lightly wounded in the operation. No civilian casualties were reported.

A police dog was also killed in the raid, it has emerged.

Authorities evacuated some 20 residents from the building earlier in the night. Schools in Saint Denis have been closed and transport to the suburb have been suspended. The raid took place about 2km from Stade de France, one of the targets of Friday's attacks.